Don’t Dreamcast, It’s Over: 15 Years After The Death of the Dreamcast

On the anniversary of its death, our intrepid detective Tim gets to the bottom of who – or what – could have killed the Sega Dreamcast and caused Sega to abandon hardware development.

You mention the words “Sega Dreamcast” to any gamer over the age of, oh, 25 and shockingly enough you will invariably get a positive response.

Gamers can’t ever seem to agree on anything, at least not in large numbers, and yet the merest mention of the Dreamcast elicits dozens of “OH MAN CRAZY TAXI” or “man i spent so much time playing Soul Calibur” responses. All of which are, of course, completely earned, because the Dreamcast was a pretty fantastic system with a shockingly solid library and a lot of really ahead-of-its-time features like online capabilities and VGA output.

Of course, as I write this, we’ve just passed the 15th anniversary of both the discontinuation of the Dreamcast and Sega’s exit from the console market. A dark day for hardcore gamers, and a day most Sony executives surely went out for celebratory drinks.

So if everyone loves the Dreamcast so much…what happened?

Did it gain sentience and sacrifice itself to prevent the inevitable robot uprising? That’s actually less depressing than the truth.

A lot of people try to pin the blame one way or another – Sega’s mismanagement between their Japanese and American branches, the onslaught of the soon-to-be-released juggernaut PlayStation 2, a lack of crucial third party support from companies like EA – the list goes on.

Really, the easiest and perhaps most broadly accurate way to look at it is the Dreamcast was simply the victim of a perfect storm of timing, market changes, and previous corporate issues.

At the time of its launch – November 27, 1998 in Japan, followed by the iconic 9/9/99 American release – Sega was already in a pretty bad spot. The Saturn, while a big success in Japan, was more or less a flop in America; not the sort of failure that would bankrupt a company, but not exactly a continuation of the success of the Genesis (which was, ironically, not nearly as successful in Japan).

Finding itself in the “rise to heaven or sink to hell” situation Nintendo would find themselves in during the next decade with the Gamecube, Sega knew the Dreamcast had to be a big big deal. Two internal teams tasked with designing their own versions of the hardware, named Dural and Black Belt, both designed in conjunction with several leading technology manufacturers like Motorola, 3DFX, and even Microsoft. Clearly, they weren’t kidding around on their hardware design.

Of course, as soon as the hardware was finalized and the Dreamcast was unveiled to the public, you could say the problems started right away. Sega’s previous console, the Saturn, was discontinued in 1998 after the Dreamcast was already scheduled for a 1999 release, leaving Sega without an active console on the market for over a year. A weird position to be in for a company already facing troubles.

The flip side of this is that the Japanese launch is considered to have been a little…premature. The system’s launch in 1998 put it two years ahead of its nearest competitor, the PS2, and many felt the launch was a little half-baked, without much software to speak of and the Saturn still holding a strong market presence (in Japan, at least).

Okay, so things were off to an iffy start, with America not having any Sega console and Japan not being too impressed by the early offerings. But things would turn around, at least temporarily. Within three days, some 140,000 of the initially available 150,000 units in Japan would be sold, actually leading to shortages in some vital chips and components needed for manufacturing. Within the next ten months, a bizarre and perfectly Y2K-looking advertising campaign had spiked consumer interest, with an estimated 300,000 pre-ordered units by the time the system launched in the States. By January 2000, some four months after the American launch, it was estimated 1.5 million Dreamcasts had been sold, which actually managed to outstrip Sega’s own predictions.

The good times would continue, at least temporarily. Sega would spend most of 2000 focusing on hardware innovations such as a focus on their groundbreaking online service SegaNet, releasing new, cheaper development kits to entice new developers to hop on board, and even making attempts to make up on sales when the PS2 began encountering launch issues and supply shortages.

Good times, however, are never really meant to last, and it brings us back to the question that opened this little piece: what exactly killed the Dreamcast?

I know how easy it would be, but we really can’t blame Shadow for this one. We can blame Shadow the Hedgehog for a LOT of things, but maybe not this.

The first, most immediate thing people tend to point to is the inability to truly compete with the PS2. Despite beating it to the market by a pretty significant margin, the PlayStation 2 had a handful of advantages going into its launch that would unfortunately (or fortunately, depending on if you were a Sony loyalist in these days) hamstring the Dreamcast in the long run. The PS2 was noticeably more powerful in many respects, even if it didn’t have the innovations the Dreamcast did, and it had a ton of positive momentum from the original PlayStation era behind it, which stood in stark contrast to the disappointment most consumers felt through the Saturn era.

Marketplace conditions weren’t exactly favorable, either. The Dreamcast’s fairly early launch placed it not only in competition with the PlayStation 2, but it also had to face down the original PlayStation and the Nintendo 64, both of which were fairly healthy at the time with the Nintendo 64, in fact, roundly outselling the Dreamcast in Japan for the first year or so of its launch. By attempting to leapfrog the current console generation, Sega may have inadvertently created a marketplace far too busy and crowded to remain sustainable, particularly in Japan where the Saturn was still being manufactured – shades of an issue Sega had in the previous console generation, where their Sega CD and 32X platforms further divided a user base that already had the Genesis, SNES, and also-rans like the 3DO and Jaguar to choose from.

Not to mention how hilariously easy it was to pirate software for it, and the lack of EA Sports titles didn’t help matters even if Sega’s own 2K Sports series was frequently considered just as good or better.

But in the end, perhaps Sega just saw the writing on the wall. Even during the heights of the Dreamcast there were internal plans to create software for mobile, non-Sega platforms like the Pocket PC, Neo Geo Pocket, and WonderSwan, a few of which would make it to market. This was the late-90s equivalent of making games for mobile platforms even while manufacturing your own hardware, but the seeds were clearly planted for Sega’s exit.

With plans and designs in place to support other platforms with their own software, and not seeing an end in sight for the Dreamcast’s dwindling sales through the dying days of 2000 and into 2001, Sega announced their withdrawal from the hardware market on March 31, 2001. A day that will live in infamy in many people’s minds, myself included, as an innocent, shell-shocked 13 year old.

The final, official Dreamcast game still managed to come out in 2003, so…it couldn’t have been THAT dead.

But I come here to praise the Dreamcast, not bury it, even if we are celebrating the anniversaty of its death. The innovations it brought into gaming are legion, and many of them stay with us today – the current online structure for any console that requires a paid subscription basically owes its existence to SegaNet, and it’s hard to imagine the various Wii and WiiU controllers without Sega’s fun, innovative, and goofy peripherals like the Samba De Amigo maracas or Sega Bass Fishing rod.

Above all else, no matter what we think about its life and death, it’s still a damn, damn fun system. The varied library means there’s something for everyone, from RPG fanatics to shooter fans to sports people, not to mention the system’s absolutely fantastic arcade ports.

And maybe it was perfect that the Dreamcast was Sega’s last system? One last burst of pre-millennium optimism, perfectly distilled into a pleasing white hardware design and games that focused on fun above all else. If Sega could have decided their legacy, it would have been perfectly contained within the Dreamcast: hardware innovation, brightly colored and fun games, and a brilliant sense of aesthetics that perfectly convey the mood of a specific place and time.

So let’s not be sad. There’s a vast library of Dreamcast games to explore, there’s an active and thriving fan community, and there’s even amazing fan projects like this Dreamcast disk drive simulator, designed to lengthen the lifespan of your beloved old system.

Instead, let’s go fire up the game of your choosing, hear those pleasantly optimistic opening chimes (and the ever-present beep of the VMU), and have yourself a good damn time. Me? I’m partial to Crazy Taxi.NOW LET’S GO MAKE SOME CA-RAAAAAAAZY MONEY!

You did that and then some, thanks for taking the time to write such an amazing article. Its nice knowing that the Dreamcast is still loved. It was a great part of gaming history, though it was a short time it will be remembered forever. Thanks for bringing back some great gaming memories.